How to spend money on innovation in Poland more effectively?

I spoke on it during the III Marshal Convent in Torun, December 4. Slides summarize my speech.

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How newspaper headlines can deceive us...

The new York Review of Books has a nice article by Tony Parks on how headlines, which are usually the responsibility of the newspapers' editor not the writer, may mislead and confuse the readers. Good read and a warning to all writers and readers alike.

Three most interesting excerpts:

"Writer and reader continue to nurture the comforting illusion that they are at opposite ends of a direct line of communication, that the writer has spoken exactly and completely his mind on the matter in question, while the reader has followed and understood his reasoning from beginning to end. In reality, every message, whether in book, newspaper, or blog, is mediated in all kinds of ways, all of which tend to push the text toward two related editorial priorities: melodrama and the received idea."

and

"But nothing prejudices the way a reader comes to a piece more than its headline. Nothing is more likely to make him or her believe, even after reading the article through, that the author has said something he has not said and perhaps would never want people to imagine he has said"

and

"It wasn’t always thus. Up until about a century ago, a headline or title was usually a neutral attempt to inform the reader of the contents of an article or book. But as the twentieth century progressed, or regressed, it was more and more understood as an advertising opportunity and the writing itself as no more, no less, than “content”—a consumer good. Newspapers on the verge of financial meltdown grow desperate and clearly seek to gratify their particular readership’s supposed prejudices. I just heard a BBC interview with Alan Rusbridger, the editor of the leftwing Guardian, about an ongoing spat between his paper and the rightwingDaily Mail. Rusbridger spoke of a mutual respect between two papers that knew how to give their target readership what they wanted. He didn’t appear to realize how depressing and patronizing this was as a comment on both readers and journalists. As if the argument between the papers was in fact no more than an effective commercial ploy".

My article in the Polish edition of "Forbes"

"Polski nowy Złoty Wiek: z europejskich peryferii do centrum"



Andrzej Wajda wyreżyserował kolejny, świetny film. Jego „Wałęsa. Człowiek z Nadziei” jest zasłużenie polskim kandydatem do Oskara. Tło filmu pokazuje jednak, jak siermiężna była polska rzeczywistość w tamtych czasach. Jakże wiele się od tego czasu zmieniło

The full text available here

Financial Times reviews the "Poland's New Golden Age" paper

Financial Times has reviewed the paper on its BeyondBrics blog. This is a fairly nice review. An excerpt below:


"Most people looking at a global economy buffeted by five years of crises and turmoil would be loath to call this a “Golden Age”. But that is just what Poland is experiencing, according to a new World Bank paper. Marcin Piatkowski, a World Bank economist, makes the fairly convincing argument that central Europe’s largest economy is enjoying its greatest period of stability since the country appeared on the map of European history more than a thousand years ago."

Poland's new generation is the most competitive generation ever

As I argue in the World Bank paper, economic models, which spit out long-term growth projections, are deeply flawed as they are blind towards soft, but nonetheless critically important factors such as culture, values or the determination to get ahead and catch up with the West.

Specifically, growth models compare oranges to apples when they do not reflect the fundamental difference in Poland between the old, post-Soviet generation and the new, European generation in terms of work ethos, command of English, personal integrity, entrepreneurship, educational aspirations, social trust, openness, internet use or civic engagement.

The old, 50+ generation has throughout their lives acquired skills, which allowed them to survive under communism, but have proven difficult to thrive in capitalism. Kafkaesque incentives, lack of innovation, acceptance of mediocre quality, lack of focus on customer service and satisfaction, and a guarantee of employment promoted a skill set and mentality that are not the same as those needed today in modern European capitalism. The work ethos also suffered, following in the footsteps of earlier generations.

In turn, the young generation of Poles today is probably the most competitive Polish generation ever. Anecdotal and formal evidence (Social Diagnosis 2011, 2013, Boni 2011) suggests that the new generation is more materially motivated, more assertive, and more focused on success than the old generation. It is also much more traveled, cosmopolitan, urban, open-minded and European. It is also significantly better educated: only 13 percent of the generation aged 55-64 has tertiary education relative to 39 percent for those aged 25-34, one of the largest differences among the OECD countries (OECD 2013). The new generation is also widely perceived to be among the most productive and hard working in Europe, in reversal of old stereotypes.

Interview on the "Poland's New Golden Age" paper by Obserwator Finansowy

The interview entitled "The best time for Poland after 500 years" (in Polish) has been published by the National Bank of Poland's "Obserwator Finansowy". The English version is here

My new World Bank's paper on "Poland's New Golden Age: Shifting from Europe's Periphery to Its Center" - comments welcome!

I have just published a new paper in the World Bank Policy Research Working Paper Series, WPS 6639 on "Poland's New Golden Age: Shifting from Europe's Periphery to Its Center". The paper's abstract is below.

To my knowledge, the paper is the first attempt to:

1. Draw worldwide attention to the remarkable economic performance of Poland since 1989, becoming Europe's No. 1 in terms of GDP growth. The country has also done very well relative to 40 countries at a similar level of development, including all Asian Tigers and other emerging markets, coming in in the top 5 between 1995 and 2012.
2. Argue that in mere 20 years Poland seems to have offset almost 500 years of economic decline relative to Western Europe, moving on its way from the continent's periphery to its center;

3. Assert that the rise of Poland (and the rest of Central Europe) will re-shape Europe's politics, affect the functioning of the EU and -- through the EU -- affect the global economy.

Comments to the paper are much welcome! 

They will help me to write a book based on the paper.

ABSTRACT

The objective of the paper is (i) to help fill the gap in knowledge on the long-term economic history of Poland; (ii) to provide a new perspective to the debate on the economic future of Poland, with a special focus on its historically unprecedented post-transition growth experience; and (iii) to analyze critically long-term growth projections for Poland. The paper argues that (i) Poland has just had probably the best 20 years in its economic history, growing the fastest among all European economies and one of the fastest worldwide; (ii) by 2013, it Poland achieved levels of income, quality of life, and well-being likely never experienced before, including relative to Western Europe, a natural benchmark; and (iii) Poland is well placed to continue converging with the Western European levels of income, permanently moving from the economic periphery of Europe, where it languished for centuries, to the European economic center. The twenty-first century thus promises to become Poland's new Golden Age. The paper calls for further research on the lessons from Poland's successful growth model for other countries in the region and beyond as well as on the long-term implications of the rise of Poland for the future of Europe

My speech on Poland's Golden Age

Puls Biznesu, a business daily, published an article summarizing my speech on Poland's future growth prospects delivered during the Emerging Markets Business Conference held in Warsaw earlier this week. It is entitled "Poland in the middle of its Golden Age".

This is an unauthorized and unedited text, but gets some points right. Pics from the conference are here

New report on Poland's competitiveness

Last week, we launched a report on Poland's Competitiveness ("Competitive Poland. How to Advance in the World's Economic League?"), which I have co-authored as part of an independent team of experts led by Prof. Jerzy Hausner, Poland's former Deputy Premier and Minister of Economy, now member of the MPC.

The launch took place in the Presidential Palace and was chaired by the President Komorowski himself. Aside from the research team, the launch featured a large group of leading experts, who commented on the report, academics and media.

The report in Polish is available here: http://kongresig.pl/pl/konsultacje-raportu/

The English version should be coming soon.

How to spend 10 billion euro more effectively? A new World Bank report on innovation

The electronic version of the World Bank report on "Poland Enterprise Innovation Support Review", which I have co-authored, is finally out.

In a nutshell, the report assesses (i) how effectively Poland has spent almost 10 billion euro of EU and Polish funds on supporting enterprise innovation in the current EU funding perspective and (ii) recommends changes in institutions, instruments and ideas to spend another 10 billion euro in the new EU perspective 2014-2020.

New books

1. Think Twice: Harnessing the Power of Counterintuition by Michael J. Mauboussin (**)
2. Beyond austerity: A path to economic growth and renewal in Europe by Charles Roxburgh, McKinsey Global Institute, Baudouin Regout and Jan Mischke (**)
3. Brain Rules: 12 Principles for Surviving and Thriving at Work, Home, and Schoolby John Medina (**)
4. Incognito: The Secret Lives of the Brain by David Eagleman (**)
5. Start-up Nation: The Story of Israel's Economic Miracle by Dan Senor and Saul Singer (***)
6. Restless by William Boyd (**)
7. Leszek Miller, Robert Krasowski "Anatomia siły", Czerwone i Czarne, 2013 (***)

Europe vs. the US - how sclerotic is Europe?

The ongoing narrative, supported by the global English-speaking media, is that there is something fundamentally wrong with Europe, which is "not competitive, can't create jobs and can't grow". It compares the sclerotic, lazy and quickly aging old continent the with the young, dynamic and attractive USA (with all these supposedly great facebooks etc). Sounds familiar?

Except that it is not true.

I have just looked at the official IMF numbers from the World Economic Outlook and compared Europe's GDP per capita growth (PPP), both for the euro zone and EU-27, with the US.

The conclusion: since 1993, the economic performance of EU-27 was better than in the US. The euro zone's level of GDP per capita (data available only from 1993, so I am not manipulating with time periods here) in 2011 was only 5% lower than in the US relative to the starting level in 1993, but at exactly the same level relative to 2000! Sweden has grown much faster than the US in the whole period (and of course Poland was better than all of them).

So, how sclerotic is Europe?

Figure: GDP (PPP) per capita, 2011/1993 (1993=1) and 2011/2000 (2000=1)

	2011/1993		2011/2000
Sweden	2,17	Sweden	1,52
EU-27	1,96	Germany	1,46
USA	1,89	EU-27	1,45
Germany	1,87	USA	1,37
Euro area	1,83	Euro area	1,37
France	1,77	France	1,35

Source: IMF World Economic Outlook

My paper on PKO BP's anti-cyclical role during the global crisis

The World Bank has just published its first edition of the "Global Financial Development Report".

It includes my box on PKO BP's very positive role during the 2008-2011 global crisis (Chapter 4) based on a background paper.

In a nutshell, I argue the following:

The case of Poland’s PKO BP suggests that domestically owned banks can play a useful counter-cyclical role during crises by supporting lending to the economy, becoming de facto “creditors of last resort”. This is largely because they are less subject to exogenous shocks, are more often funded in the domestic markets, and are more inclined to react to changing credit market conditions based on domestic fundamentals alone. They are also insulated from exogenous decisions of foreign parent banks affecting lending policies of their domestic subsidiaries.


State ownership has further enhanced PKO BP’s ability to withstand the crisis by imposing on the bank a conservative lending and funding culture, enhancing the bank’s ability to attract deposits during the crisis thanks to the implicit State guarantee, and by participating in the crucial capital increase.

PKO BP story also highlights the benefits of Poland’s diversified bank ownership structure, with foreign banks playing a very positive role in supporting financial deepening (World Bank, 2009), especially during good times, and domestically owned and state-controlled banks taking the lead on lending during times of external turbulence.

However, the case of PKO BP suggests that for the state-controlled banks to be successful, they need to be commercially-oriented, open to free market competition, and focused on “utility banking”. They also need to be transparent, professionally managed, ideally by managers chosen through a meritocratic selection process, and subject to hard budget constraints.

All of these keys conditions can be at least partly achieved by taking state banks public and listing them on a stock exchange. This not only forces these banks to adopt international accounting and reporting standards, but—thanks to a watchful eye of domestic and international shareholders—also helps impose market discipline, ensure compliance with best global practices of corporate governance, strengthen commercial orientation and sustain high quality of lending, including by mitigating political pressures. Without such market pressures, the key conditions for success are not always easy for state-owned banks to adhere to. A well embedded culture of transparency, accountability and strong business ethics is also useful, although policy recommendations on how to achieve it are not straightforward.

Education for free and for all!

I have just signed up for www.coursera.org, a website with "the world's best courses, online, for free".

It offers plenty of interesting courses, including in economics (such as Principles of Economics for Scientists from Caltech, which would be a great complement to students of macroeconomics at Kozminski!) and in history (such as The Modern World: Global History since 1760, even though--in line with the biased Western tradition--it tends to almost totally ignore New Europe, as if it was a different continent!). No grades and credits for courses, but completion certificates are already available for some (which, I predict, will soon start to appear on people's CVs...)

This is an utopian dream close to coming true: a top-notch quality of education for everyone in the world with an internet connection and an ability to read and write in English.

Where is it going? In no time, these online courses will transform into full blown online universities, which will rival the established modes of off-line learning. Completion certificates from the online courses will compete with the standard course grades. Traditional universities should beware - they'd better seize on this new mode of learning or gradually lose the fight if not eventually perish (there will also be a need for a place to get young people together to benefit from the joys of the youth and find spouses...).